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Federal Borrowing

As of summer 2015, the United States government is currently in debt by this much, which is really too much to say. ($18,154,879,109,499.27)

The U.S. government has four main sources it borrows money from: Private American citizens and companies, foreign institutions and countries, the Federal Reserve, and federal accounts.

The debt held by federal accounts is the money that the U.S. Treasury has borrowed from itself. The United States Government has certain taxes that can only fund specific programs like social security. Some of these programs run a short-term surplus and the treasury then uses that money to pay for other types of federal spending. This money is called “debt held by federal accounts,” which makes up close to one third of the federal debt.

Another third of the U.S. federal debt is owned by international investors by purchasing U.S. Treasury bonds as investments. The three countries that currently hold the most U.S. debt are China, Japan and Brazil.

The next biggest owners of the federal debt are domestic investors such as private banks and U.S. citizens.

The Federal Reserve holds close to 14 percent of the US federal debt. The Federal Reserve’s function is to control the money supply and set interest rates in the U.S. economy. So it is therefore independent of the federal government.

The term “debt ceiling” was being tossed around in the news in 2013. The debt ceiling is the limit Congress sets on the amount that the U.S. Treasury can borrow. If the federal debt amount reaches the debit ceiling, the government can no longer legally borrow any more money. The first debit celling was passed in 1939 and it has been raised more than 140 times since then.

So the next time you hear politicians talk about government debt, remember it takes a lot more than words to fix it.